According to latest Lulu IPO news reports, Lulu Retail Holdings announced the IPO price range of its shares between Dhs1.94 and Dhs2.04 per share. The IPO implies a market valuation of Dhs21.07 billion ($5.74 billion) at the upper end. This valuation positions the Lulu IPO as the biggest in the UAE for 2024.
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Lulu’s IPO aligns with UAE’s economic objectives to attract more investment into the ADX. The anticipated proceeds of $1.43 billion (Dhs5.27 billion) from the IPO will set a new high for fundraising activity in the UAE this year.
According to latest Lulu IPO news reports, the listing is part of a series of large IPOs in the UAE, which collectively have raised nearly $8 billion in 2024.
Lulu Retail is offering 2.6 billion shares, representing a 25% stake in the company. The shares are available in two tranches, one for institutional investors and another for retail investors.
Four cornerstone investors including Abu Dhabi Pension Fund, Bahrain Mumtalakat, Emirates International Investment Company and Oman Investment Authority have committed to purchasing $205 million worth of shares.
Lulu Retail aims to offer a dividend payout ratio of 75% of distributable profits after tax. Dividends are set to be paid semi-annually, starting with a payout for the six-month period ending December 31, 2024.
According to latest Lulu IPO news reports, Lulu reported $192 million in profits in 2023 and projects steady growth in profit margins, targeting a 5% net profit margin in the medium term, up from 2.6% in 2023.
In 2024, Lulu recorded a 5.6% revenue increase reaching $3.9 billion in the first half. The UAE accounts for 36% of Lulu’s total revenue followed by Saudi Arabia at 19% and Oman at 17%.
Lulu’s growth strategy focuses on expanding its presence in the UAE and Saudi Arabia, with a target of opening 90 new stores across the GCC within the next five years.
Lulu’s IPO size outpaces the $877 million NMDC Energy IPO and the $986 million Pure Health IPO. ADNH Catering raised Dhs864 million through a 40% public stake sale earlier in 2024.
The estimated market capitalization for Lulu Retail post-IPO falls between AED 20.04 billion and AED 21.07 billion.
Cornerstone Investors in this IPO Include:
- Bahrain Mumtalakat Holding Company
- Abu Dhabi Pension Fund
- Oman Investment Authority
- Emirates International Investment Company (EIIC)
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Total commitments from these cornerstone investors are approximately AED 753 million, with EIIC committing $100 million.
Shares allocated to cornerstone investors will be under a 180-day lock-up agreement post-listing.
Timeline for Lulu IPO Events
- Opening of Retail Subscription: October 28, 2024
- Closure of Retail Subscription: November 5, 2024
- Final Price Announcement: November 6, 2024
- Allocation and Refund Date: November 13, 2024
- ADX Listing Date: November 14, 2024
Lulu IPO news shows that the final offer price will be decided through a book-building process. This approach will allow the market to determine the price based on demand, which is expected to remain high given the IPO’s response.
Lulu Retail has committed to a dividend payout ratio of 75% of annual distributable profits post-tax, which will be distributed semi-annually.
According to latest Lulu IPO news reports, the first dividend payout, following the listing on ADX is expected in the first half of 2025 for the six months ending December 31, 2024.
Emirates NBD Capital, HSBC Holdings, Abu Dhabi Commercial Bank (ADCB) and Citigroup are the appointed joint bookrunners. Moelis & Co. serves as the financial advisor for this IPO.
Joint Lead Managers are Abu Dhabi Commercial Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC Bank Middle East and EFG Hermes.
Joint Lead Receiving Banks are First Abu Dhabi Bank and Abu Dhabi Commercial Bank, with ADCB also retained as the listing advisor.
This IPO is expected to be the largest in the UAE for 2024, even surpassing the $877 million offering from NMDC Energy.
Lulu Retail operates 240 stores across various formats, with plans to enhance its store network, expand its product offerings and reward its loyal customer base.
Lulu Retail Holdings’ reputation as a leading hypermarket chain in the Middle East particularly in the UAE, Saudi Arabia and Oman.
Lulu Retail Holdings was founded in 1974 by Yusuff Ali, Lulu has grown to become a prominent retail name in the GCC.
The company offers a wide range of products catering to various shopping preferences, making it a one-stop destination for over 600,000 daily shoppers.
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